Everyday PM

 

As I have oft noted before in this blog, Dave Christensen’s work[i] on Cost Performance Index (CPI) stability led to a fascinating (well, to me, at least) conversation (debate?) about whether or not the Estimate at Completion (EAC) formula based on the CPI, namely

EAC = BAC / CPI

…could be considered reliably able to produce an EAC that was within ten points of the actual at-completion costs of a project, since the study fairly established that the CPI doesn’t vary more than ten points once the Project has passed a certain percentage complete (typically pinned at 18%, practically at 20 – 30%). The reason that I find this wonkish discussion so fascinating has to do with the way one calculates CPI. It’s simply the Budgeted Cost of Work Performed (BCWP) divided by the Actual Cost of Work Performed (ACWP). What’s BCWP? That’s an estimate of the Project’s cumulative percent complete multiplied by its Budget at Completion. Everyone seeing the pattern here? The whole shebang, which, recall, is (arguably) accurate to within ten points, is

EAC = ACWP / % Complete

…, believe it or not. Yes, arguably the most important bit of information that a PM-centric Information System can produce is available using only two easily-captured parameters. Crazy, huh? But wait: it gets better.

The same formula works for duration! Want a reliable estimate of when something’s going to be done? Divide the cumulative duration by the same percent complete figure, and you have the at-completion duration estimate.

The easy uses of this old Project Controllers’ hack are everywhere. On a long trip, and sick of hearing the kids ask “when will we get there?” Simply tell them your percent complete (based on remaining miles / travelled miles [oooh! Don’t tell them the percentage – give them the remaining miles and travelled miles figures, and let them calculate it!]), and time your trip began, and they will have their total duration. Subtracted from cumulative duration, and you have your arrival time, within ten points.

I live fairly close to a large park, and City Government has been promising an indoor swimming pool facility for over 20 years. The actual Pool Project completion data was always around seven years into the future. But, based on the above formula, I’ve known since the first days of those promises that it would never happen within the time frame promised, and, therefore, was spared the frustration of having my hopes dashed.

Did your significant other talk you into watching a movie you would not have otherwise seen? And is said movie having you wonder how much longer you will be subjected to either grotesquely overdone CGI or incredibly predictable romantic-comedy dialogue? Note when the actual movie started, and use the following table:

Like real-life Projects, you should never attempt to claim more than 90% complete until you are actually finished with the project. Resist the temptation, both in the tedious theater setting and in your percent complete estimate to your Project Controller, to add points in very small increments to give the illusion of making progress when things are really at a standstill. It’s best for both your Project’s Management Information System integrity, and your mental health. Divide the time when you noticed these occurrences in the movie into the difference between time now and when the movie actually started, and you will know the approximate duration of your ordeal.

I’ve actually seen some Earned Value training materials that use this approach to calculating when you can expect to finish painting a room (or rooms), and it’s probably fairly reliable to do so. However, DO NOT use this formula for plumbing, unless you are a professional. There’s just something about amateurs attempting to do plumbing – even if it’s just replacing a toilet float – that carries with it multiple unexpected additional jobs, or tool acquisitions. Also, this approach can be expected to lose all efficacy if applied to Projects that include children. Are kids cute? Sure. Lovable? Absolutely. Uniquely gifted with the ability to completely wreck any management science-based approach to assessing performance in general, and at-completion costs or durations in particular?

Every single day.

[i] Christensen, David & Payne, Kirk. (1991). Cost Performance Index Stability: Fact or Fiction?. Vol. Proceedings of the 1991 Acquisition Research Symposium. 12. 10.1080/10157891.1992.10462509.